The taxes went into effect on July 1 because the government thought that the high price of crude oil was letting oil companies make unexpected profits and that the exchequer should get a piece of these gains.
Starting on Sunday, the government cut the windfall tax on crude oil made in India from Rs 10,500 per tonne to Rs 8,000 per tonne and cut in half the tax on exporting diesel from Rs 10 to Rs 5 per litre. At the sixth review of one-time taxes on oil companies every two weeks, it also got rid of a tax of Rs 5/litre on the export of jet fuel.
The taxes went into effect on July 1 because the government thought that the high price of crude oil was letting oil companies make unexpected profits and that the exchequer should get a piece of these gains.
The tax rates have gone down because the price of crude oil has gone down on international markets.
In the last review, which took place two weeks ago, the Centre cut the windfall tax on domestic crude by 21% and the special levies on exports of diesel and ATF by 37% and 44%, respectively, because refining margins had gone down.
Windfall taxes on crude were cut by 31%,
Diesel and ATF are mostly exported by private refiners, Reliance Industries and Rosneft-owned Nayara Energy. However, the windfall levy on domestic crude is aimed at producers like state-owned ONGC and Vedanta-owned Cairn.
Benchmark Since August, the gross refining margin (GRM) for Singapore has been between $8 and $12/bbl. Diesel cracks have been between $25 and $50 per barrel, and ATF cracks have been between $25 and $50 per barrel.
On July 1, the Centre put a special additional excise duty of Rs 23,250/tonne on crude oil and export taxes of Rs 6/litre, Rs 13/litre, and Rs 6/litre on petrol, diesel, and ATF, respectively. After that, the tax on gasoline was taken away. Exports from Special Economic Zones do not have to pay a windfall tax.
The reason the government is putting these taxes in place is to get a piece of the “windfall profits” that some domestic companies made when oil prices went up around the world. The move is also meant to fix the shortage of fuel on the domestic market, which was caused by the fact that private refiners didn’t keep up with supplies to domestic retailers while they focused on the very profitable export markets.
READ MORE ARTICLES;
- Cybercrime unit head hired by the crypto-exchange operator
- Crypto lender Celsius is not asking for payments on outstanding loans
- Despite quitting Meta, Sheryl Sandberg gets security due to ‘threats to her safety
- Investors Research Corp buys Dimensional U.S. Targeted Value ETF (NYSEARCA:
- Newfoundland is hard to reach. Tourism strategy should include adversity
